First-generation margin improvement efforts were often departmentally led initiatives, which many times failed to engage providers and operated in silos. These efforts were successful in harvesting some low-hanging fruit in areas including labor and supply chain, but more difficult transformational changes have been elusive and initiatives have not been sustainable.
The “second curve” in margin improvement will need to focus on decreasing unwarranted clinical variation and transforming the clinical operating model. Healthcare boards and senior leaders are now realizing that the next generation of margin and quality improvement efforts will require clinically driven operational solutions coupled with a customized technology platform.
The success of this transformation will be determined by our ability to ensure it is clinician-led.